SVP Bridget van Kraligen on IBM Transformation

Bridget van Kralingen [Senior Vice President, Global Business Services] of IBM discusses the company's transformation and also reveals a new chip that can power your phone for a week.

IBM is transforming, and is very confident about this transformation.  Part of the process is to speak clearly about it.  There are three very large forces:

1. Massive real-time data is the new oil (i.e., resource)
2. Cloud prompts new business models
3. Social and mobile engagement is making shifts for clients

Accordingly, IBM has invested $23 billion into Big Data, created a Watson Division, and driven very hard off the cloud by building new data centers around the world. They're making big bets on this portfolio, such as hiring 15,000 analytics consultants.  My question then is:  How is it all working out?  Eight consecutive quarters of declining revenues isn't exactly comforting.  Can CEO Ginni Rometty truly pull the new IBM through to where it needs to be, not just from a technical or innovative standpoint, but also from a business or commercial standpoint?

Artificial Intelligence, that is, for Watson, needs the right ecosystem, and Manhattan is the hub for it.  IBM is drawing on design thinking.  For now, Watson has high IQ but low EQ.  The way van Kralingen describes Emotional Intelligence is curious: It's about Watson responding and interacting in a way that is more helpful and customized to us (rf. IBM acquiring of Cognea).  Once IBM works this out, then Watson can truly adapt to our style and serve our purpose.  It can coach us as well as learn from us, and otherwise help us do what we need to do (e.g., following medical protocol).  Indeed we're in an era of humanizing technology, so that it is delights us and enriches our lives.  It isn't just about automation for the sake of efficiency and productivity.  All of this is how I conceive of algorithms à la Theory of Algorithms: that is, as smart and able to learn, and also as adaptable and personalized.

Commercially, Watson can advise people on insurance needs.  Depending on lifestyle, life changes, and home location, as I understand, it can recommend the right policies.  But, you see, consumers per se are not necessarily tapping Watson themselves.  Rather, it's the insurance companies doing so, and consequently working with consumers like us on what we need.  In addition, then, it sharpens the algorithms for marketing and selling to us.  Philanthropically, it's more than heartbreaking to hear that 25% of disease burden is in Sub-Saharan Africa, and that in particular 22% of cervical cancer cases from around the world are in that very region.  Watson offers the cognitive capability to help healthcare professionals and workers to tackle disease.  It does so by ingesting the body of knowledge on medicine that exists, and allowing itself to be queries via natural (i.e., non-technical) language.

IBM has invested $3 billion in creating the chip beyond silicon.  Going forward, silicon will no longer have the size and power to grapple with exponential data and complex analytics.  Enter: graphene.  van Kralingen showed us a chip the size of a postage stamp, and explained that it's coated with graphene that's one-atom thick.  Practically speaking, if we put this in our smartphone, we wouldn't need to charge it for a week.  In fact, if I heard her correctly, our smartphone wouldn't need a battery for a week.  It would also process much faster, but I wonder how much this speed would depend on bandwidth.  Add quantum devices and synaptic computing, and you can see why I believe IBM, along with Google and maybe Microsoft, will lead our technology future.

The foregoing positions IBM squarely as a consultancy.  van Kralingen points to the following trends among IBM clientele:

1. Clients have a deep desire to redo organization process and redo client interaction vis-a-vis data 
2. Analytics can be embedded in any organizational process
3. Information is available anywhere because of mobile devices

Clients must innovate at warp speed and innovate on an ongoing basis.  From practical-technical matters such as dealing with legacy data, to headier efforts such as integrating strategy and analytics, IBM is in a unique position to advise, solve and deliver.

van Kralingen talks at a brisk pace, and her transition from one point to another and from one subject to another is seamless.  Fortune magazine decided to title this interview as Is IBM in Trouble? and I think, at the end of the day, that decision is most unfortunate.  IBM may be in trouble if we continue to see declining revenues over the next two to three years.  But the essence and the thrust of the interview is the breathtaking concepts, research and initiatives that IBM is immersed in.  In brief, I feel more confident that indeed IBM is a prominent leader to our future and that its business will do quite well in the process.

Thank you for reading, and let me know what you think!

Ron Villejo, PhD